Bitcoin and cryptocurrency investors have been eagerly awaiting the next cut to bitcoin – if it ever comes.
The bitcoin price, on track to be one of the best performing assets of the year, remains far from its record high of around $ 20,000 set in late 2017.
Now, Silicon Valley venture capital firm Andreessen Horowitz has predicted that a “fourth crypto cycle” could be on the horizon – possibly sending the bitcoin price significantly higher.
The bitcoin price has been through three cycles so far, with the bitcoin and crypto next … [+]
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“The 2017 cycle spawned dozens of exciting projects in a wide range of areas including payments, finance, games, infrastructure, and web apps,” partners Andreessen Horowitz, Chris Dixon and Eddy Lazzarin wrote in a blog post.
“Many of these projects are launching in the near future, possibly driving a fourth crypto cycle.”
Last month, Andreessen Horowitz announced its second $ 515 million bitcoin and crypto fund, adding to the $ 300 million fund it launched in mid-2018.
2020 fundraising missed the original $ 450 million target and will be dedicated to cryptocurrency and blockchain projects – specifically decentralized finance, next-generation payments and the decentralized internet.
“While crypto cycles look chaotic, over the long term they have generated steady growth in new ideas, code, projects and startups – the primary drivers of software innovation,” Dixon and Lazzarin wrote, adding “people who have been in crypto for a long time considers space to evolve in cycles, alternating between periods of high activity and ‘crypto winters.’ “
The price of bitcoin climbed to around $ 20,000 at the peak of what Andreessen Horowitz called it … [+]
Coinbase
The VC company marks a “basic order” to the first three cycles of 2011, 2013 and 2017 bitcoin and crypto. First, the price of bitcoin and other cryptocurrencies is rising, leading to renewed interest and social media activity.
New users get involved, contribute new ideas and code and create projects and startups. These product launches inspire more people, “eventually leading in the next cycle.”
The bitcoin and crypto price innovation cycle model is based on anecdotal evidence and data, according to Dixon and Lazzarin.
“Anecdotally, from the hundreds of conversations with crypto founders we’ve had, we often hear stories like: ‘I heard about crypto in [2011, 2013, 2017] when the prices spiked and everyone was talking about it. At first I thought it was just about money, but then I started reading white papers and blog posts, learned more about the potential of the technology, and eventually fell in love with it. ‘”
The company also “analyzed 10 years of data, including Reddit comments in crypto subreddits, Github commitments in crypto repos, and Pitch Book financing data.”
Andreessen Horowitz found that the data showed “choppy but steady growth in all the keys … [+]
Andreessen Horowitz
Meanwhile, the bitcoin and cryptocurrency community is still regrouping following a planned supply squeeze that saw the volume of new bitcoin being created cut in half.
Earlier this month, the amount of bitcoin awarded to those who maintain the bitcoin network, called miners, was cut in half – falling from 12.5 bitcoin to 6.25.
Many had warned that the price of bitcoin could fall following the third halving but most analysts seem confident that the bitcoin price will eventually climb.